Press Release

Getty Realty Corp. Announces First Quarter 2018 Results

JERICHO, N.Y.--(BUSINESS WIRE)--
Getty Realty Corp. (NYSE:GTY) (“Getty” or the “Company”) announced today
its financial results for the quarter ended March 31, 2018.

Highlights For The First Quarter

-- Net earnings of $0.25 per share

-- Funds From Operations (FFO) of $0.44 per share

-- Adjusted Funds From Operations (AFFO) of $0.42 per share

-- Entered into an amended and restated credit agreement

Christopher J. Constant, Getty’s President & Chief Executive Officer
stated, “Our first quarter financial results continue to demonstrate the
stability of our platform and the sustainability of our cash flows. Our
performance was supported by the strength of the convenience and gas
sector, which we believe continues to be one of the strongest consumer
segments in the country. Additionally, we successfully completed the
refinancing of our credit facility during the quarter, which extended
our near-term debt maturities by four years. Also, subsequent to quarter
end, we completed an accretive acquisition leaseback transaction that
added 30 convenience store and gasoline station properties in the
Southern United States to our portfolio. Finally, we are pleased to have
been assigned a BBB- investment grade debt rating by Fitch Ratings,
which should lead to an improved cost of capital over time, which
further reinforces the confidence we have in our portfolio and in our
ability to deliver returns for our shareholders.”

Net Earnings

The Company reported net earnings for the quarter ended March 31, 2018,
of $10.0 million, or $0.25 per share, as compared to net earnings of
$9.7 million, or $0.28 per share, for the same period in 2017.

Funds From Operations (FFO) and Adjusted Funds From Operations
(AFFO)

FFO for the quarter ended March 31, 2018, was $17.8 million, or $0.44
per share, as compared to $18.2 million, or $0.52 per share, for the
same period in 2017.

AFFO for the quarter ended March 31, 2018, was $16.8 million, or $0.42
per share, as compared to $14.2 million, or $0.40 per share, for the
same period in 2017.

All per share amounts in this press release are presented on a fully
diluted per common share basis, unless stated otherwise. FFO and AFFO
are defined and reconciled to net earnings in the financial tables at
the end of this release. During the fourth quarter of 2017, the Company
revised its definition of AFFO. See “Non-GAAP Financial Measures” below.

Results of Operations

Revenues from rental properties in continuing operations increased by
$4.4 million to $28.3 million for the quarter ended March 31, 2018, as
compared to $23.9 million for the same period in 2017. The increase in
revenues from rental properties for the quarter ended March 31, 2018,
was primarily due to revenue from the properties acquired during the
year ended December 31, 2017.

Property costs from continuing operations were $4.9 million for the
quarter ended March 31, 2018, as compared to $4.8 million for the same
period in 2017. The increase in property costs for the quarter ended
March 31, 2018, was principally due to an increase in reimbursable real
estate taxes, offset by a decrease in maintenance expenses.

Environmental expenses from continuing operations were $1.2 million for
the quarter ended March 31, 2018, as compared to a credit of $0.5
million for the same period in 2017. The increase in environmental
expenses for the quarter ended March 31, 2018, was principally due to
increases in environmental legal fees and net environmental remediation
costs. Environmental expenses vary from period to period and,
accordingly, undue reliance should not be placed on the magnitude or the
direction of change in reported environmental expenses for one period,
as compared to prior periods.

General and administrative expenses from continuing operations were $3.6
million for the quarter ended March 31, 2018, as compared to $3.5
million for the same period in 2017. The increase in general and
administrative expenses for the quarter ended March 31, 2018, was
principally due to an increase in employee related expenses.

Impairment charges in continuing operations were $2.4 million for the
quarter ended March 31, 2018, as compared to $3.5 million for the same
period in 2017. Impairment charges in continuing operations for the
quarters ended March 31, 2018 and 2017, were primarily attributable to
the effect of adding asset retirement costs due to changes in estimates
associated with the Company’s environmental liabilities and reductions
in estimated sales prices from third-party offers based on signed
contracts, letters of intent or indicative bids for certain properties.

Portfolio Activities

There were no property acquisitions during the three months ended March
31, 2018. Subsequent to March 31, 2018, the Company acquired fee simple
interests in 30 properties for $52.2 million and entered into a unitary
triple-net lease with GPM Investments, LLC. The Company expects the
transaction to be immediately accretive to net earnings. Also,
subsequent to March 31, 2018, the Company acquired fee simple interests
in two properties for a purchase price of $2.7 million in the aggregate.

Redevelopment Activities

As of March 31, 2018, the Company is actively redeveloping 10 of its
former convenience store and gasoline station properties either as a new
convenience and gasoline use or for alternative single-tenant net lease
retail uses. As of March 31, 2018, the Company had signed leases on six
additional properties, that are currently part of its net lease
portfolio. These properties are expected to be recaptured from their
current leases and transferred to redevelopment when the appropriate
entitlements, permits and approvals have been secured.

Balance Sheet

On March 23, 2018, the Company entered into an amended and restated
credit agreement (the “Restated Credit Agreement”) amending and
restating its prior credit agreement. Pursuant to the Restated Credit
Agreement, the Company (a) increased its borrowing capacity under its
unsecured revolving credit facility (the “Revolving Facility”) from
$175.0 million to $250.0 million, (b) extended the maturity date of the
Revolving Facility from June 2018 to March 2022, (c) extended the
maturity date of its unsecured term loan (the “Term Loan”) from June
2020 to March 2023 and (d) amended certain financial covenants and
provisions. The Restated Credit Agreement also reflects reductions in
the interest rate for borrowings under each of the Revolving Facility
and the Term Loan.

As of March 31, 2018, the Company had $375.0 million of outstanding
indebtedness with a weighted average interest rate of 4.6%. The
Company’s indebtedness consisted of $150.0 million in aggregate
borrowings under the Restated Credit Agreement and an aggregate
principal amount of $225.0 million of senior unsecured notes. Total cash
and cash equivalents were $18.0 million as of March 31, 2018.

2018 Guidance

The Company reaffirms its 2018 AFFO guidance at a range of $1.68 to
$1.74 per diluted share. The Company’s guidance does not assume any
potential future acquisitions or capital markets activities. The
guidance is based on current plans and assumptions and is subject to
risks and uncertainties more fully described in this press release and
the Company’s periodic reports filed with the Securities and Exchange
Commission.

Conference Call Information

Getty will hold its First Quarter Earnings Conference Call on Wednesday,
May 9, 2018, at 8:30 a.m. EDT. To participate in the call, please dial
(888) 394-8218, or (323) 701-0225 for international participants, ten
minutes before the scheduled start time. Participants may also access
the call via live webcast by visiting the investors section of the
Company's website at ir.gettyrealty.com.

A replay will be available on Wednesday, May 9, 2018, beginning at 11:30
a.m. EDT through 11:59 p.m. EDT, Wednesday, May 16, 2018. To access the
replay, please dial (844) 512-2921, or (412) 317-6671 for international
participants, and reference pass code 8688667.

About Getty Realty Corp.

Getty Realty Corp. is the leading publicly-traded real estate investment
trust in the United States specializing in the ownership, leasing and
financing of convenience store and gasoline station properties. As of
March 31, 2018, the Company owned 824 properties and leased 78
properties from third-party landlords in 28 states across the United
States and Washington, D.C.

Non-GAAP Financial Measures

In addition to measurements defined by accounting principles generally
accepted in the United States of America (“GAAP”), the Company also
focuses on Funds From Operations (“FFO”) and Adjusted Funds From
Operations (“AFFO”) to measure its performance. FFO and AFFO are
generally considered by analysts and investors to be appropriate
supplemental non-GAAP measures of the performance of REITs. FFO and AFFO
are not in accordance with, or a substitute for, measures prepared in
accordance with GAAP. In addition, FFO and AFFO are not based on any
comprehensive set of accounting rules or principles. Neither FFO nor
AFFO represent cash generated from operating activities calculated in
accordance with GAAP and therefore these measures should not be
considered an alternative for GAAP net earnings or as a measure of
liquidity. These measures should only be used to evaluate the Company’s
performance in conjunction with corresponding GAAP measures.

FFO is defined by the National Association of Real Estate Investment
Trusts as GAAP net earnings before depreciation and amortization of real
estate assets, gains or losses on dispositions of real estate,
impairment charges and cumulative effect of accounting change. The
Company’s definition of AFFO is defined as FFO less (i) Revenue
Recognition Adjustments (net of allowances), (ii) non-cash changes in
environmental estimates, (iii) non-cash environmental accretion expense,
(iv) environmental litigation accruals, (v) insurance reimbursements,
(vi) legal settlements and judgments, (vii) acquisition costs expensed
and (viii) other unusual items that are not reflective of the Company’s
core operating performance. Other REITs may use definitions of FFO
and/or AFFO that are different than the Company’s and, accordingly, may
not be comparable.

Beginning in the fourth quarter of 2017, the Company revised its
definition of AFFO to exclude three additional items – environmental
litigation accruals, insurance reimbursements, and legal settlements and
judgments – because the Company believes that these items are not
indicative of its core operating performance. While the Company does not
label excluded items as non-recurring, the Company believes that
excluding items from its definition of AFFO that are either non-cash or
not reflective of its core operating performance provides analysts and
investors the ability to compare its core operating performance between
periods. AFFO for the quarter ended March 31, 2017, has been restated to
conform to the Company’s revised definition.

FFO excludes various items such as depreciation and amortization of real
estate assets, gains or losses on dispositions of real estate and
impairment charges. In the Company’s case, however, GAAP net earnings
and FFO typically include the impact of revenue recognition adjustments
comprised of deferred rental revenue (straight-line rental revenue), the
net amortization of above-market and below-market leases, adjustments
recorded for recognition of rental income recognized from direct
financing leases on revenues from rental properties and the amortization
of deferred lease incentives, as offset by the impact of related
collection reserves. Deferred rental revenue results primarily from
fixed rental increases scheduled under certain leases with the Company’s
tenants. In accordance with GAAP, the aggregate minimum rent due over
the current term of these leases is recognized on a straight-line basis
rather than when payment is contractually due. The present value of the
difference between the fair market rent and the contractual rent for
in-place leases at the time properties are acquired is amortized into
revenue from rental properties over the remaining lives of the in-place
leases. Income from direct financing leases is recognized over the lease
terms using the effective interest method, which produces a constant
periodic rate of return on the net investments in the leased properties.
The amortization of deferred lease incentives represents the Company’s
funding commitment in certain leases, which deferred expense is
recognized on a straight-line basis as a reduction of rental revenue.
GAAP net earnings and FFO include non-cash changes in environmental
estimates and environmental accretion expense, which do not impact the
Company’s recurring cash flow. GAAP net earnings and FFO also include
environmental litigation accruals, insurance reimbursements, and legal
settlements and judgments, which items are not indicative of the
Company’s core operating performance. GAAP net earnings and FFO from
time to time may also include acquisition costs expensed and other
unusual items that are not reflective of the Company’s core operating
performance. Acquisition costs are expensed, generally in the period
when properties are acquired and are not reflective of our core
operating performance.

The Company pays particular attention to AFFO, as the Company believes
it best represents its core operating performance. In the Company’s
view, AFFO provides a more accurate depiction than FFO of its core
operating performance. By providing AFFO, the Company believes that it
is presenting useful information that assists analysts and investors to
better assess its core operating performance. Further, the Company
believes that AFFO is useful in comparing the sustainability of its core
operating performance with the sustainability of the core operating
performance of other real estate companies.

Forward-Looking Statements

CERTAIN STATEMENTS CONTAINED HEREIN MAY CONSTITUTE “FORWARD-LOOKING
STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. WHEN THE WORDS “BELIEVES,” “EXPECTS,” “PLANS,”
“PROJECTS,” “ESTIMATES,” “ANTICIPATES,” “PREDICTS” AND SIMILAR
EXPRESSIONS ARE USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT’S CURRENT BELIEFS AND
ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT AND
INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH
MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY
TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS.
EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO,
THOSE REGARDING THE COMPANY’S 2018 AFFO PER SHARE GUIDANCE, THOSE MADE
BY MR. CONSTANT, STATEMENTS REGARDING THE RECAPTURE AND TRANSFER OF
CERTAIN NET LEASE RETAIL PROPERTIES, STATEMENTS REGARDING THE ABILITY TO
OBTAIN APPROPRIATE PERMITS AND APPROVALS, AND THOSE REGARDING THE
EXPECTED ACCRETIVE NATURE OF THE POST QUARTER-END ACQUISITION AND
LEASING TRANSACTION.

INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN
BE FOUND IN THE COMPANY’S PERIODIC REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY
RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE
EVENTS OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS.

GETTY REALTY CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except per share amounts)

March 31,

2018

December 31,

2017

ASSETS:

Real estate:

Land

$

587,511

$

589,497

Buildings and improvements

377,875

379,785

Construction in progress

1,948

1,682

967,334

970,964

Less accumulated depreciation and amortization

(136,723

)

(133,353

)

Real estate, net

830,611

837,611

Investment in direct financing leases, net

88,881

89,587

Notes and mortgages receivable

32,502

32,366

Cash and cash equivalents

18,013

19,992

Restricted cash

1,114

821

Deferred rent receivable

34,833

33,610

Accounts receivable, net of allowance of $1,962 and $1,840,
respectively

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